Telcos, zero rating critics wary of Trai's free data proposals

Telcos and net neutrality backers have both criticised the sector regulator’s recommendations on free data. While carriers say that an additional aggregator layer creates unwarranted complexity, backers of an open Internet have raised concerns that the model resembles zero-rating.

Net neutrality advocates add that free data aggregator rules create a non-level playing field as they may put small content providers at a disadvantage as they may not have the wherewithal to register with an aggregator, and therefore run afoul of discriminatory pricing rules issued in February this year, which banned zero-rating initiatives such as Facebook’s Free Basics and Bharti Airtel’s Airtel Zero.

“There is every possibility that the aggregators may create a high entry barrier through higher costs for signing up, or a long wait-time and selecting partners,” said Nikhil Pahwa, co-founder of the Net Neutrality campaign in India, in a personal opinion note.

Cellular Operators Association of India (COAI), which represents top telcos Bharti Airtel, Vodafone India and Idea Cellular besides new entrant Reliance Jio Infocomm, said that the Telecom Regulatory Authority of India (Trai) should use existing framework of rules to get data into rural areas, which is already the role of telecom service providers as per existing licence norms, instead of complicating matters further.

“The authority should keep it simple, and therefore, it should rather recommend giving incentives to telecom service providers (TSPs) to go deeper into rural or remote areas,” Rajan Mathews, director general of COAI, said.

Trai on Monday suggested two methods of giving out free data. The first involves the government giving out free 100 MB data to each rural subscriber per month, where Universal Service Obligation Fund (USOF) subsidises the cost.

In the second, third party aggregators are allowed to disburse data free of charge on several conditions, including one where they must deal in a telco-agnostic manner, and conform to the rules barring discriminatory pricing of data services.

The schemes to be offered on top of the aggregator model must also be telco-agnostic and aggregators should not have an arrangement with telcos. A data reward could be given for download of an app or for visiting a particular website, the regulator suggested.

But net neutrality backers have red flagged the recommendations, saying that a model which reimburses a user for pre-selected website has the same impact as zero-rating, and hence violates net neutrality, a concept of allowing free access to internet. “The third party aggregator scheme should not result in the sender or the content owner paying for the data to enable customers getting free access to the content,” said Prasanth Sugathan, counsel at Software Freedom Law Centre (SFLC) in New Delhi.

“If the sender has to pay for the data, even if it is telco-agnostic, this will result in the level playing field getting distorted. Any free access provided should be to the entire Open Internet and not to parts of it,” he added.

Pahwa highlighted that there was no specific restriction for a telco subsidiary or an investee, like Hike, to offer or create free data platforms. Further, since aggregators will be dependent on telco data packs, no rules explicitly say that telcos must provide data recharges or recharge plans to the aggregators.

“Facebook and Google are now best positioned to allow apps to offer databacks as rewards,” Pahwa said, adding that the two were earlier looking to offer a service that allowed Android apps on the Play Store to be zero rated.

He said that Trai’s views on zero-rating makes the proposal not look like a contravention of differential pricing rules as Trai defines zero-rating as a scheme that provides access to data services, content or select applications, from a particular ISP, without paying any access fee.

“The crafty thing that the Trai has done is that it has defined Zero Rating in a manner that this aggregator model doesn’t come across as a violation,” Pahwa said, adding that zero-rating referred to making access to a particular website or application free, while making access to all websites and applications free, without discrimination, was referred to as Equal Rating.